FTSE closes higher by 0.4% after volatile day as US jobs beat expectations

<p>The FTSE 100 closed higher by 0.4% at 5649 on Friday to finish the week on a positive front as UK stocks edged back ground […]</p>

The FTSE 100 closed higher by 0.4% at 5649 on Friday to finish the week on a positive front as UK stocks edged back ground lost over the last two days of consecutive weakness. The trading day was all about the latest release of US non farm payrolls data and with heightened optimism going into the release of the numbers after Thursday surprisingly strong private jobs data, investors were not disappointed.

On all three fronts, non-farm payrolls, private payrolls and unemployment rate, all consensus expectations were beaten, helping to give stocks a initial boost higher, lifting the FTSE 100 to a high of 5682 within minutes. However, as much of the market had predicted such a strong number, after the initial knee jerk reaction in the market, investors started to use the daily highs to exit positions at higher levels and this triggered a sharp retracement in the FTSE 100 from 5675 to 5630 going into the close.

BurBerry shares topped the FTSE 100 on the day, rising 3.9% on the day and closely followed by similar gains for Petrofac and Amec. On the downside were shares of Man Group, the world’s largest listed hedge fund, which fell a large 8% on the day after a raft of ratings cuts by brokers on the fund management sector.

Next week brings a greater focus on three key themes; the sovereign debt situation with the latest meeting of the famed Merkozy duo, ECB and BoE rate decisions and company earnings, which kick off in the US with Alcoa on Monday.

For now, it’s been a positive start to the new trading year, seeing the FTSE rise 1.4% on the week though certainly with sentiment remaining fairly fragile concerning the major European banks such as UniCredit, it could be a fairly volatile next trading week.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.